How to develop the buyer-supplier relationship management : An investigation of the Swedish furniture industry

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Abstract:

During the last decades, the competition changed from taking place between individual companies to take place between supply chains. As a natural consequence, the importance of buyer-supplier relationships (BSRs) increased since both actors need to work together (Dyer & Singh, 1998; Kannan & Choon Tan, 2006). During a seminar provided by the Swedish trade and employers’ association Trä- och Möbelföretagen (TMF), companies within the Swedish furniture industry revealed the BSR management to be deficient from time to time, where price focus has increased from the producer side. Whereas the suppliers stressed the disinterest to compete on price, the authors formulated the purpose of this thesis as: To investigate how the furniture industry can further develop the management of BSRs for the benefit of both producers and suppliers within the industry segment.

To fulfill the purpose, the authors have conducted an observation, interviews and distributed a survey to both producers and suppliers of the studied industry segment, design- and office furniture. The aim was to holistically understand how the BSRs are currently managed, and from the current state provide improvement suggestions.

The analysis of the collected data highlights that the problems perceived by the companies are not as wide-ranging as first indicated, but there are rather small-scale changes that need to be done in order to improve the BSR management. The suggested improvements that need to be considered were drafted from earlier theories and merged into a single BSR framework. However, a BSR development model, suggesting that the furniture industry could beneficially manage the BSRs more strategically, also accompanies the BSR framework. The authors conclude that in order for companies to manage BSRs more strategically, the main focus needs to shift from price towards flexibility, long-term commitment and co-development. Only by shifting focus from transactional BSRs towards collaborative BSRs, the authors argue the furniture industry can realize the domestic BSRs’ full potential.

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